Another Fuel Price Hike In The Offing?

THE ?TIGHTENING OF OUR BELTS? CONTINUES UNABATED
According to the FREE PRESS, there are indications that another hike in fuel prices may occur within the next 90 days.

A Special Assistant to the Minister of Energy, Mr. K. Owusu, is reported to have said in an interview with GNA, that there would probably be an upward review of fuel prices within the next three months, based on how crude oil prices fare on the international market.

?Fuel prices will be reviewed?

GNA -- Mr Kwame Owusu, Special Adviser to the Minister of Energy, has said that the current fuel pricing system might undergo a review in three months after its announcement.


The review is necessary to assess the performance of the new pricing system and to find out if the world price of crude oil would have come down to enable the petroleum tender board to incorporate the amount for the payment of the debt at the Tema Oil Refinery (TOR).


Speaking to the Ghana News Agency (GNA) in an interview, Mr Owusu admitted that the Ministry of Energy has a formula that could incorporate a total of ?530 on a litre of fuel to pay the TOR debt in 10 years.


He said if government had added the amount to pay the debt to the current price of fuel, it would have pushed the price of petrol to ?23,000. "That would have been too much for the people to bear," he conceded He said the ministry is waiting for some time before going to Parliament for the review and possibly the addition of the debt payment, which is already incorporated in the current formula.

The GNA quizzed the Special Adviser on the possibility of reducing the price of liquefied petroleum gas (LPG) to encourage its use, and Mr Owusu said if the price of any petroleum product has to be reduced at the time of the review, it has to come about through cross subsidies. He explained cross subsidies to mean a reduction in the price of one product for subsequent addition to another product.


The interview by the GNA followed concerns expressed by a section of the public that there was the need for the government to reduce the price of LPG, a by-product of crude refining, to serve as an incentive for people to use the product, instead of relying on fuelwood and charcoal which have been contributing to the depletion of the country's forests.


Mr Owusu said apart from cost recovery, the current petroleum pricing formula enables the TOR to spread the total cost of production on each of the products that come out of the refined crude oil.


He expressed the hope that despite the situation in Iraq and Venezuela, other oil producers will produce more crude oil to reduce the world market price. ?GNA